Contributed
President of First Global Financial Services Sandra Shirley was main presenter at the company's 'Tea and Talk Women and Investing' seminar, held at the Terra Nova hotel in Kingston, on Tuesday.

Becki Patterson, Business Writer

If intimate for 100 can be imagined, then First Global Financial Services (FGFS) 'tea and financial talk' to woo women investors, enlivened the image.

The setting was classic feminine - pink table cloths, tea and scones, scented candles and lots of women chatting - but the topic was heavy duty: how women must secure their futures by being financially prepared for it.

Girlish fantasy

Sandra Shirley, president of FGFS, couched her presentation around the girlish fantasy of 'living happily ever after' - but with some twists. Her 'just in case prince charming does not come through' presentation began with a look at some of the issues that challenge modern women.

"As women, we face a number of challenges in life that most men do not have to confront," said Shirley

"Women work fewer years and earn less than men; change jobs more frequently; women live longer - approximately seven years longer than men - and the average woman spends 15 per cent of her career out of the workforce caring for her children and elderly parents."

The steps to dealing with these facts of life as they are for women should include, from childhood, education, employment, financial planning and investing, Shirley suggested.

By the employment stage, she advised, every woman should create a budget to assess expenses versus income and determine how much she can invest.

"Apply the 'pay yourself first' principle, which simply means treating your investments as a budget item just as you would a bill," said the FGFS president.

The former principle may be as simple as starting a salary deduction for investment at the beginning of employment, but it also extends to taking advantage of tax-efficient opportunities available through pension plans at one's place of work.

'Tame the shop-a-holic'

But Shirley also suggests that women "tame the shop-a-holic" in themselves.

"Start to prioritise spending early, curb spending to needs and not wants. And as a rule of thumb, put away three to six months' worth of expenses to cover emergencies," said Shirley.

She adds that the new investing woman should look to equities, mutual funds and repurchase agreements and that waiting too long before starting to build such a portfolio of investments, robs one of the compounding effect or gains - that is, earning interest on pre-viously earned interest.

Shirley illustrated this point with a chart that showed how an investment of $10,000 per month at a rate of eight per cent per annum can yield millions over 10-20 years.

Frank discussions

For those women who have met their Prince Charming, open and frank discussions on individual incomes, debt and expenditure to be incurred together must be had.

Shirley also advised that women not shy away from a pre-nuptial agreement, and not dismiss the idea that it is not needed. It would be prudent to consider variations on the fantasy life of happily ever after whether with or without prince charming.

Some of these possible twists were offered in the neat form of these 'D' words: divorce, debt, disability and death.

It is also best, Shirley said, to have the following questions answered before the prince loses his charm: Is your income enough to support the family and cover expenses? Can your income provide the lifestyle to which your kids are accustomed? Was you investment plan built to withstand such an eventuality - did you prepare for your own retirement? Have you made a plan to allocate assets in the event of separation or divorce?

According to the presenter, women tend to face several major money decisions in their lives, the most important being the purchase of a home, starting a business, health care, educating children and estate planning.

She said that choosing to borrow against one's assets is a smart move and that at such a big decision time, one needs to review the financial plan originally created with the help of the right adviser.

Change in career

A woman's debt may come from redundancy or a change in career, and or medical expenses.

But regardless, Shirley said: "Using a tax-deferred instrument such as mutual funds, tax-free investments or equities could give you the additional funds you need to make your family comfortable during illness or an unexpected loss of income."

Death could be that of your own or charming prince but since women tend to live some seven years longer, it is advisable to have a retirement plan that will go further, First Global suggests.

An approximation of what will be needed in retirement is 70 per cent to 80 per cent of current income.

Shirley advised women "not to rely solely on an employer, but make contributions to the company's pension plan and make sure you have additional investments to supplement your pension contribution."

Light atmosphere, weighty matters, 'Tea and Talk' was an easy balance for FGFS.

If only the balance between finance and romance were always so rational.

beckipatterson@hotmail.com

Financial advice

Sandra Shirley's suggested list of questions to ask when considering a financial adviser: